Remember day one with your exciting new job opportunity? Yeah, that job. The one where you applied online, jumped through several hoops/interviews in order to seal the deal to several strangers that you were the perfect match against their technical/behavioral job competencies, perhaps negotiated for your pittance, and perhaps passed pre-employment screening/background check/etc. And you were anointed the grand prize winner. And remember that daunting pile of HR paperwork or online forms you rapidly rifled through at some point during that head-spinning first day/week…Thus signing away your life, and perhaps, career? Benefits, employee handbook, employee contract, etc. I mean, what could go wrong? You were going to kill it with THIS job, conquer the world, etc. Sign. Sign. Sign. And then you handed it all back to your boss or HR representative or hit “finish” on your online forms like the good soldier you are. Signed. Sealed. And, delivered. And, perhaps forgotten. Perhaps you read the fine print. Perhaps you noticed the words “NON-COMPETE” within one of those stacks/forms. Perhaps you had an attorney review. More than likely though…you just quickly signed away with very few, if any, questions asked. Why rock the boat, a shiny new boat at that, right? You were all bright-eyed and bushy-tailed, this job will be nothing but rainbows/butterflies and good times, and you wanted nothing else than to please the very person who signed your paychecks. And then you dove into your new job opportunity. Perhaps head-first into a very shallow pool. Where perhaps the water was colder than expected and/or not even the pool which was promised. Sound familiar? Now what…?
The bad news? You signed. And you are now more than likely bound to and acting under an executed contract. The fortunate news? Courts have recently limited the power of non-compete agreements to protect employees’ rights, making it possible (though certainly not guaranteed) for you to to fight and/or get out of your non-compete. More bad news? Fighting one may be costly. You are now playing a strategic game of chess where you need to think a move or two down the board.
The simple reality, you have about six options: 1) Hire an attorney and let them attempt to navigate the legal waters for you. Honestly, they may or may not be able to help. Hiring an expert would be the first logical step though. 2) Honor your executed agreement by landing a new job outside of your non-compete restrictions. Be it location, which could force you to move to get a new job outside of your non-compete area if your agreement is specific to your city. Or if possible, get a new job within another industry and wait it out. Again, outside of your non-compete restrictions. 3) Ignore it, leave, work for a competitor, hope your company does not sue, and hire an attorney to fight them if they do. Risky, borderline (if not outright) unethical, and not advisable. But yes, this is an option…Albeit a potentially expensive one. And this is if another company will even take a chance to hire you given the fact you are under a non-compete. More to come on this subject, below. 4) Stay with your company and try to find resolution. 5) Ask for and obtain a written letter of release from your non-compete from your employer. 6) Leave your employer, do not move, do not find a new job because you are only qualified for the silo under which you are restricted upon by your non-compete, and become homeless eventually. Kidding. Kind of. But yes, harsh reality time. This is not even counting a potential burnt bridge within a very small media industry where folks talk. Trust me on this.
Non-competes are obviously prevalent within our media industry and beyond. According to a 2019 report from the Economic Policy Institute (EPI), nearly 32% of private-sector businesses who responded to their survey (650 respondents surveyed) reported that all of their employees had to sign a non-compete agreement, regardless of the compensation or position. I dare to guess this number is dramatically higher within the media industry. These restrictions have hindered the ability of those who sign to possibly change jobs due to the threat of getting sued. Several states, including California and North Dakota to name a few, refuse to enforce non-compete agreements against employees. Additionally, there are several states today that will recognize non-competes, but will limit who they can be used for. While I am not providing legal counsel, many of these states will not apply non-competes to workers who are paid either on an hourly basis or who earn below a certain amount. More states are likely to follow, with even more restrictions against non-competes. And there are some states that have either completely, or in some form, made exemptions to non-competes for broadcasters. Please review your state laws and/or consider seeking legal advice.
Just to make things interesting, President Biden is now following through on a campaign promise and taking action as the latest step toward federal regulation of non-compete agreements. In mid-July, he issued a wide-ranging Executive Order that, among additional competition-focused initiatives, encourages the Federal Trade Commission (FTC) to “curtail the unfair use of non-compete clauses and other clauses or agreements that may unfairly limit worker mobility.” Check it out, it’s an interesting read but will likely not change much…yet. The Executive Order does not change the law or restrictive covenants. Today, it merely “encourages” the FTC to act. Much legal work lays ahead before any ban or limitations on restrictive covenant agreements by the FTC become reality.
For a non-compete agreement to be enforceable, it must first be reasonable. Some non-compete agreements within our industry not only restrict the ability for gainful employment within a current DMA/city, but includes every other DMA/city for which this broadcast group conducts business. Ouch. Is this reasonable? Great question. In theory, non-compete agreements help employers to protect a company’s goodwill and trade secret information. Additionally, they are often used as an effective, if not Draconian, method for retaining talented employees from making a move to a competitor, which enables the company to benefit longer from its investment in training their employees. Some might argue that if a broadcast group and/or company has a great/positive employee culture in place, these non-competes would not be necessary…But, I digress.
But what does this mean for your job search? As mentioned, if you are considering leaving a job and you have a non-compete, the best thing to do is get advice from an employment attorney before you leave. Yes, this may be expensive. However, this might prove to be a less expensive option long-term than being sued by your former employer. During my time as Director of Recruiting for Raycom Media and under strong advisement by corporate legal counsel, our team was instructed/mandated to go “hands-off” should a prospective job candidate disclose they were under an executed non-compete applicable to that job, station, and/or market. Period. UNLESS they provided a written release or obviously unless someone resided in a state where non-competes are unenforceable. We then requested a copy of their non-compete and often had our legal counsel review. Simply put, the risk/exposure to the company was too great. Unless you happen to live in one of the non-compete unenforceable states, this should be the immediate answer given from any reputable broadcast group and/or company. Period. And before you use the argument “but but but Hiring Manager/HR, my company has never gone after other employees who left and broke their non-compete agreement”…This honestly should not affect a company’s/hiring manager’s stance. You may have been either misinformed, there may have been legal action taken against those former employees you were perhaps not made aware of, and/or you might be the one they go after. Although consistency in enforcing these agreements could be used as an argument down the road if ever sued, the simple fact remains: You are under an executed agreement. Again, the intent of this article is to inform, raise awareness, but not provide legal counsel.
So what you can do? A few things. For one, get organized. Hopefully you kept your signed/executed non-compete agreement. If not, you may have to ask for it from either your manager and/or human resources. Warning: This is always a risky endeavor and will mostly likely raise some alarm bells…a bell you cannot un-ring. Once you have the copy in front of you, thoroughly review the provisions/scope: Time (six months, year, etc.), industries, location, etc. This will give you a better idea of the interests the company seeks to protect. Make sure you have actually signed the agreement in your HR file. Without the signature of both parties, a contract such as a non-compete agreement, is not legally binding on either party and a court jurisdiction is unlikely to enforce it. And please know this during these media industry heavy acquisition times, non-competes/contracts are absolutely transferrable to the new owners. Regardless, I highly recommend that you have a retained/paid employment attorney review. Not a friend/HR professional and/or wanna-be blogger like myself. Get serious legal counsel involved, quickly.
As mentioned above, you can (and perhaps should) ask for a written release from the executed non-compete from your current employer if you plan to leave your position and want to continue employment in a like position with a competitor. Yes, this is obviously risky. And yes, this typically lays all of your cards out on the table as to your intent to leave the organization. If you happen to have a non-compete agreement which was not signed by both parties, this can give you great leverage in negotiations to possibly obtain a release from the agreement, due to the simple fact there essentially is no agreement executed. Seems odd, right? But it could protect you down the road.
Assuming the non-compete was properly executed/signed, review the provisions detailing your employer’s responsibilities. If any of these things did not happen, or if they changed, the agreement is likely to be no longer enforceable. The same may hold true for any designations of your employment or your role in the company. For example, if you signed an agreement when you were a sales Account Executive and you are now a sales manager, that original non-compete agreement may no longer be enforceable. Simply put, although the agreement bound you as an AE, it may not bind you as a sales manager. Also, a key for courts is to determine whether your employment relationship may have changed. Any change of job duties, authority, or compensation may indeed invalidate the executed agreement. Additionally, you should carefully review the scope of the non-compete agreement. They job you want to leave for may not, in fact, violate the non-compete. For example, if you have a non-compete agreement that prohibits you from working for another company that uses “the same or similar technology” as your old employer, and the new employer actually uses different technology, the non-compete agreement probably doesn’t cover your new job – even if the two companies provide similar services or are involved in the same industry. Seek legal advice.
Once you have decided to ask for a written release, are organized, and have hopefully sought legal counsel, schedule a sit-down meeting with your employer. Typically, you want to meet with someone who has the power to release you (HR and/or your manager/senior management). Open your meeting by strategically communicating your desired outcome, using the outlines you’ve made, the research you have done, and/or legal counsel advise. Depending on the relationship and/or situation, you may even want legal counsel present. Go through your stance, and stress your desire for an amicable separation. You may even want to consider conceding a few points. Such as, negotiating a possible non-solicit clause to alleviate the company’s concern you may lure away clients versus the executed non-compete agreement. Non-solicits, in general, are easier to navigate and may not be as restrictive and more likely to hinder your ability to earn a living. It may be possible to negotiate a new agreement that both protects the company’s interests and allows you to take the new job you want. However, don’t get your hopes up. This may set a precedent for the company, and I have found an overall reluctance for an organization to go down this path…unless there are other circumstances at play. Regardless, get any agreement in writing and signed by both you and an employee of the company who has the power to bind the company in that instance.
Long story short, if you are under a signed/executed non-compete agreement, there are likely to be real restrictions and ramifications at play. You need to take ownership that you did, indeed, sign. In some regard, right or wrong, there is an ethical obligation to abide by the covenants. Just as there are ethical obligations for a company to not hire someone who is under an executed agreement. Think about it…In reality, it would be hypocritical for a company to do so. Especially if said companies’ intent is to then turn around and ask that new employee to sign a non-compete themselves. See the ethical dilemma? Proceed cautiously…both from the employer and employee side. And as a prospective new employee coming into an organization, please read the fine print, ask questions, and seek legal advice before signing ANY agreement in the first place. There is nothing wrong with taking a deep breath and asking your employer for the opportunity to thoroughly review. This decision alone could either alleviate or cause serious future complications for you, your family, your career, where you want (or do not want) to live, and your ability to earn a fair wage. You have been fairly warned…
Ty Carver has over 30+ years of recruiting, HR management, sales, and leadership experience…including the last 10 specific to the broadcast media industry. He is the Founder/CEO of Carver Talent, a local broadcast media management recruiting firm. As the former Director of Recruiting for Raycom Media, he has deep industry relationships. Have a media corporate executive or television station management recruiting need? Contact firstname.lastname@example.org for more information.